In a strategic initiative aimed at enhancing domestic gas availability and curbing high prices, gas companies will be required to allocate 20% of their exports to the Australian market first.
Energy Minister Chris Bowen revealed that starting July 1, 2027, the new east coast gas reservation policy will oblige the major gas exporters based in Queensland to dedicate a fifth of their output for Australian consumption.
During a press briefing, Bowen emphasized, “This policy is designed to ensure a modest surplus in Australian gas supply, which should help drive prices down.”
According to the policy, companies must fulfill their domestic supply commitments before being allowed to participate in the international spot market.
The policy will be applicable only to new contracts moving forward.
Resources Minister Madeleine King highlighted that this regulation is expected to shift the negotiating power, fostering a buyer’s market that could result in lower prices.
“Our gas market will no longer be hostage to international markets,” she said.
Australia is one of the world’s biggest liquefied natural gas exporters but risks supply falling below demand from as early as 2028, according to the Australian Competition and Consumer Commission.
Bowen admitted Australia was the only country in the world without a gas reservation despite being advised for decades that gas supply would eventually become an issue.
He and King began consulting with the industry on an overhaul to gas sector regulations late last year.
Greens resources spokesperson Steph Hodgins-May said the policy was “written by the gas industry, for the gas industry” and called for the government to introduce a gas export tax.
Prime Minister Anthony Albanese has rejected the recent push to introduce a 25 per cent tax on gas exports after independent Senator David Pocock revealed more federal tax is paid on beer than on gas exporters.
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